Mallozzi sued for $1 million over tips

Former waiter claims Mallozzi Group kept more than $1 million

Updated 6:51 am, Tuesday, April 16, 2013

Brothers John, left, and Bobby Mallozzi inside their new restaurant, "Johnny's" on State Street in Schenectady March 27, 2013. (John Carl D'Annibale / Times Union)

Brothers John, left, and Bobby Mallozzi inside their new...

Chef Bobby Mallozzi is part of a Rotterdam-based family that oversees a veritable empire of eating establishments, including Villa Italia, the Brown Derby and the restaurant at Albany's Italian American Community Center. (Suzanne Kawola/Life@Home)

A New York City attorney who has won settlements from some of the biggest names in the restaurant business is now representing a former waiter for the local Mallozzi Group who claims the restaurant company kept more than $1 million in tips intended for banquet waitstaff.

The server, Ryan Picard, alleges the Mallozzi Group collected a 20 percent "service personnel charge" on banquet contracts but gave none of it to him and more than 100 other servers.

The suit, filed at the end of March in Albany County Supreme Court, cites a 2008 state Court of Appeals decision in the case Samiento v. World Yacht, which ruled that any "charge purported to be a gratuity" — and, importantly, charges that customers believe will go to staff — cannot be kept by the company.

The Mallozzi Group runs a bakery and restaurant in Schenectady, a banquet hall and hotel in Rotterdam, a restaurant and banquet hall in Albany and food service at two area golf courses.

Typically, banquet staff are not compensated like restaurant servers, who are paid less than the hourly minimum wage but keep all of their tips; waiters and waitresses working banquets get a much higher flat pay — $12 to $15 an hour isn't unusual locally — but none of the 18 to 20 percent that is added to banquet contracts.

At issue in the Mallozzi case is whether the "service personnel charge" was suggested to be or understood by customers as an extra amount, like a tip, to be paid to the servers. The suit contends a "reasonable customer" would have believed Mallozzi waitstaff would get the service charge, according to the suit. (Some banquet operations now use terms like "administrative surcharge" or "catering fee" to clarify the money isn't meant for servers.)

Jeannette Bowers, operations director for the Mallozzi Group, said Monday that Mallozzi banquet contracts have never used the words "tip" or "gratuity." She said the company has not told, suggested or implied to customers that the charge would be passed along to servers; however, she said, any additional funds above the 20 percent that customers choose to leave are given in full to waitstaff.

Bobby Mallozzi, who with his siblings runs the company founded by his parents 48 years ago, said that Picard, who worked for the Mallozzis for two years, is a disgruntled former employee. He called the suit meritless and said, "We will vigorously fight it."

Picard is represented by D. Maimon Kirschenbaum of the New York City firm of Joseph & Kirschenbaum, who refers to himself as "New York restaurateurs' most feared attorney." His bio on his firm's website boasts that he has "recovered tens of millions of wages and tips stolen from workers in the hospitality industry." Kirschenbaum's targets have included Mario Batali, Jean-Georges Vongerichten, Drew Nieporent, Keith McNally and Masaharu Morimoto. The restaurant news website Eater.com frequently refers to the attorney as a "thorn in the restaurant industry's side."

Last summer, Batali and his business partner Joe Bastianich agreed to pay $5.25 million to settle a class-action suit for skimming tips and other wage and labor violations at their empire of restaurants. Kirschenbaum led the suit.